The media have recently reported extensively on the furore surrounding global group Parmalat, leading to speculation about the certainty of the company’s prospects in South Africa.
Parmalat South Africa issued a press release on January 5 in which chief executive officer Fernando di Gaetano said it was not in any financial difficulty.
“Our financial position is sound and our profitability has been improving year-on-year over the past three years. In fact, in 2003, Parmalat South Africa is set to achieve its best performance to date.”
This, he said, is because Parmalat South Africa “operates as an independent business entity and is therefore able to continue with business as usual”, even though it is a “wholly owned subsidiary in the global Parmalat group”.
Di Gaetano assured customers that products would continue to appear on supermarket shelves.
“I would like to assure our stakeholders that Parmalat South Africa is a solid company and that we are able to meet our commitments and to honour all contractual obligations.”
Speculations over the uncertainty of the company and a possible takeover of the South African division “are totally unfounded”, he said.
Werda Biesenbach, corporate communications manager of Parmalat South Africa, told the Mail & Guardian Online that it is not expecting an investigation but “everything is in limbo until the Italy investigation is complete”.
Parmalat South Africa is doing fine, “it’s wonderful to say we are healthy. Even the cows are happy,” she says.
Biesenbach says: “Enrico Bondi, the administrator of the international situation, has appointed PriceWaterhouseCoopers to assess each country individually in terms of profitability and report back.”
After the financial assessment, further steps for each of the 31 companies in the Parmalat group will be taken if they are required, she says.
The plans for financial and industrial restructuring are expected to be completed by the end of January, Di Gaetano said.
The South African Food and Allied Workers Union (Fawu) disagrees.
“We are concerned about the job security issue and the autonomous position of Parmalat South Africa and whether the international scandal affects whether it’s sold or not,” media officer Dominique Swartz told the M&G Online.
Fawu will be meeting with Parmalat executives next Tuesday to discuss these issues, she says.
John Botha, managing director of Global Business Solutions, says Fawu has reason to be concerned.
Based on the infamous case of LeisureNet in South Africa, which landed in similar trouble, there “has to be some form of repercussion”, he says.
“When other companies were found to be guilty of some form of corruption and embezzlement, there was a negative impact on staff and jobs.”
Even though Parmalat South Africa is an independent company, the issue of a direct link to the parent company raises concerns over the possibility of links between recent events and the local company, Botha says.
“As a wholly owned company it is linked to the parent company and cannot distance itself from fiduciary risks.”
From a labour point of view, there will be some form of repercussions, he says.
“Because of the uncertainty, they will at least have the impact of job freezes.”
But, the advantage of Parmalat South Africa being independently run means that Botha doesn’t anticipate “a huge backlash initially, although the threat is there”.
The South African Chamber of Business (Sacob) does not believe that there is cause for concern.
James Lennox, chief executive officer, says: “I can understand the concerns among customers, employees and creditors, but I’m sure that Parmalat will address these issues.”
As Parmalat is an independent business entity that says it is unaffected by the International scandal, Sacob accepts its statements.
“We should take them at their word; there is no reason to doubt what the company is saying.”
Because of the sound provisions in South African law regarding labour issues, he says: “I hope their operations are unaffected by the goings-on in Italy and North America.”
Parmalat chaos still spreads